Higher shipments of beverage can and automotive sheet drove total flat rolled aluminum product shipments up two percent to 3,123 kilotonnes in fiscal 2016. For the full fiscal year, the percentage of the company’s shipment portfolio stemming from automotive sheet grew to 15 percent, up from eleven percent in the prior year. By the end of fiscal 2016, all five of the company’s recently constructed automotive finishing lines were producing and shipping automotive sheet products to customers.
Revenues decreased eleven percent to $9.9 billion in fiscal 2016, as higher shipments were more than offset by a 16 percent decrease in average base aluminum prices and a 58 percent decrease in local market premiums.
The rapid decline in local market premiums over the early months of fiscal 2016 resulted in $172 million in negative metal price lag for the full year, and was the primary driver of the twelve percent decrease in Adjusted EBITDA to $791 million in fiscal 2016. Although the company uses derivatives contracts to minimize the price lag associated with LME base aluminum prices, adequate cost-effective hedges are not available for local market premiums.
Excluding the impact of metal price lag in both years, Adjusted EBITDA was $963 million in fiscal 2016, up seven percent compared to $896 million in fiscal 2015. The increase was driven by strong operational performance, higher total shipments, product mix benefits mainly the result of a 47 percent increase in automotive shipments, and favorable foreign exchange in Brazil. Current year results were partially offset by less favorable recycling benefits due to significantly lower aluminum prices as compared to the prior year, as well as general inflation and higher fixed costs associated with new automotive and recycling operations.